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Determining detention charges to be ‘unreasonable’

Federal Maritime Commission fines Hapag-Lloyd

The Federal Maritime Commission has fined Hapag-Lloyd $822,220 in civil penalties for 14 violations of the US Shipping Act. Investigations found that the company had incorrectly applied detention and demurrage (D&D) charges to 11 containers handled by California drayage firm Golden State Logistics (GSL).

The D&D charges levied to GSL amounted to $10,135, but FMC said the penalties were punitive in nature as the carrier had “knowingly and wilfully” applied the D&D charges despite GSL being unable to return the containers.

More specifically, FMC’s Bureau of Enforcement (BOE) had originally claimed that the fine should be $16.5m, because “a significant penalty is required to both deter Hapag-Lloyd’s violative behaviour and ensure future compliance” with the FMC’s interpretive rule on D&D, adopted in 2020.

However, it accepted that it did not provide the burden of proof for certain days that D&D fees were levied and thus reduced the overall penalty.

Recently, the US Federal Maritime Commission’s Vessel-Operating Common Carrier (VOCC) Audit Program announced that it will expand its scope to also evaluate how shipping lines are serving U.S. export shippers.


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